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Whether you are a first-time buyer looking for a mortgage, remortgaging, looking to move into a bigger home or want to take advantage of the government’s Help to Buy scheme, you have one important decision to make: whether you should use a mortgage broker or bank.

In this article we will look at the benefits and pitfalls of going direct vs using a firm of independent mortgage advisers like Visionary Finance.

Going Direct to your Bank/Building Society

Of course, it is possible to approach your bank or building society and arrange your mortgage directly with them. One of the major benefit of doing so is that the bank will know your profile as a customer thereby potentially reducing the requirement of supplying supporting paperwork and documentation. They may also be able to offer you a pre-approved lending limit so you will know at the outset how much you lending you will be eligible for. By having a pre-existing and long-term relationship with your bank/building society, however, provides no guarantees that you’ll benefit from any preferential mortgage rates, because banks and building societies can only offer mortgages from their own product range. A further limitation to using your own bank/building society is that you have to fit their specific eligibility criteria. If your circumstance does not meet the rigid lending criteria you will either be offered a lower loan amount or declined an offer for lending. This lack of flexibility in lending policy, as well as limitations in mortgage products, can mean that you may be paying a higher rate of mortgage interest and not benefitting from the best deal in the mortgage market.

Using a Mortgage Broker

When identifying which firm of brokers you would like to work with, it is important to consider the following:

Is the broker independent of all banks and building societies?

Does the broker offer mortgages from the whole of the mortgage market or are they tied to a limited panel?

Is the broker charging a fee for their service or are you getting a fee-free brokerage service?

Some mortgage brokers are tied to certain lenders only, meaning they are restricted in the number of lenders they have access to, thereby limiting the possibility of you getting the best mortgage deal. As a consumer, your best position would be to engage with a broker who will offer you mortgage options from the whole of the mortgage market meaning you get the lowest rate based on your circumstance. Many independent mortgage brokers charge a brokerage fee which will be payable to them once they arrange your mortgage for you. In addition to the brokerage fee charged, the broker will also receive commission from the lender. Paying a brokerage fee doesn’t mean that you will receive any special access to rates or lenders because if the broker is whole of market a non-fee charging broker can do exactly the same things as a fee charging broker. Charging a fee in addition to receiving commission is merely brokers topping up the amount they earn on a case.

Why Visionary Finance?

We have built our reputation on providing excellent customer service, and what makes us an attractive brokerage is that we do not charge a brokerage fee and we are an independent whole-of-market mortgage broker.

Our service offering provides a very convenient solution for our clients ensuring that most of our document verification is done electronically. We also transact with many of our clients by telephone and email allowing their mortgage to be facilitated without having time consuming face to face meetings. We’re able to utilise and leverage our wide knowledge of the market to provide you with a mortgage deal that suits your circumstances. Our expert mortgage advisors are able to provide you with impartial advice and we take pride in offering a personal service.

We are also specialists in the new build sector and for help-to-buy mortgages. We have built relationships with some of the largest housing developers in the country, offering a tailored solution that helps first-time buyers to get on to the property ladder.

Additionally, we have extensive knowledge in buy-to-let mortgage market particularly since the recent PRA and FCA changes that were introduced in September 2017. We have built an excellent reputation with landlords across London and the South of England. Our knowledge of the buy-to-let mortgage market and the tax implications for landlords puts us in the best position to provide expert advice.

If you are considering a mortgage broker or bank, check out this useful guide from money.co.uk, or get in touch with our team today by calling us on 01908 465100 and we’ll demonstrate our customer service.

In light of the recent announcement by the Bank of England that rates are likely to rise sooner than first expected, why not allow us to review your mortgage and to explore the option of fixing your mortgage to hedge against any interest rate movement.

In February’s Bank of England Monetary Policy Committee meeting, it was decided that the base rate would be kept at 0.5% but warned that an increase in the base rate would come sooner than was anticipated. Ben Broadbent, the Deputy Governor of the Bank of England, said on Friday that he did not think that a couple of interest rate rises in the space of a year would come as a great shock. On the back of these comments the financial markets are predicting that there is a 70% chance of a rate rise in May 2018.

As a result of these forecasts we have looked into the best fixed-rate mortgage options for you to consider, in order to minimise your exposure to interest rate movements.

If you would like to discuss your specific circumstance or mortgage requirements with us, then please get in touch immediately on 01908 465100. We will run through a few questions to understand your circumstance and will be able to instantly provide you indicative mortgage options.

Life insurance isn’t the most engaging of topics at the best of times. If the thought of life insurance is making you want to sink in to an early grave, bear with us. Even if you come away with a half-smile, having learned something mildly interesting, it’ll be worth the read.

As the technological landscape changes, so does how we get around, how we communicate and how we source products. It used to be that we implemented technology to help us adapt to a more demanding market, but it seems of late it’s us who are now having to adapt to an ever evolving, unrelenting, technology-ridden culture. Technology has certainly made some things easier now. But does that mean they’re better?

With protection products, like anything from music to underwear, you can buy it online. It’s fast. It’s easy. And you can do it at your leisure. So, why not buy online?

If you know what you’re looking for and genuinely read the Terms and Conditions for everything you buy or subscribe to, there’s no reason not to buy protection products online – but at your own risk.

By buying life insurance, critical illness cover or income protection online yourself, it’ll mean you won’t have access to the Financial Services Compensation Scheme as the onus is on you to fully understand what you’re purchasing and its limitations. If, like 73% of people in 2014 (source: Guardian), you do not fully read the T’s & C’s, you could be in for a huge surprise when it comes to a claim.

If you misunderstood a question and accidently answered incorrectly when applying, the insurer could class that as ‘non-disclosure’. Simply put, it could mean they don’t pay out. This often adds to the myth that life insurance policies never pay out. To ease your mind with this regard, the Association of British Insurers (ABI) confirmed in 2015 98.2% of all term assurance policies (the most popular type of life insurance policy sold) paid out (source: ABI).

On critical illness policies, there are definitions the insurers use for illness covered. These definitions have a minimum standard laid out by the ABI. For example, the definition for stroke with some insurers will be such that the claimant will have to have been told by doctor (or medical practitioner) they’ll have permanent residual symptoms brought on by the stroke in order for them to pay out a claim. Other insurers may say they’ll pay out after 24 hours of the claimant having symptoms of the stroke.

When buying online, there is little material available and that which is available is cumbersome and non-specific. ‘Key facts’ documents rarely have the full definition in writing. You’ll have to have purchased the policy and had ‘the handbook’ sent to you via post for you to see the particular definition – or search it online, then compare with other insurers. Then, liaise with someone with a medical background to establish which definition is more robust. Even when this is done, you’ll be led to complete an application online and if you have a medical disclosure, family history of things like diabetes, cancer or Huntingtons Disease or your occupation requires overseas travel, you could be stuck with a price increase (known as a rating or loading) and/or have exclusions applied to your policy.

Sadly, most people will either just take it on the chin and keep the policy they applied for, as they don’t have time to go through another application, reapply with another insurer and get a similar situation, or they’ll give up on protecting themselves completely.

This needn’t be the case.

If you speak to a professional, preferably someone with an R05 qualification, they can ask about health, lifestyle, occupation etc up front. They can also speak to the underwriters to establish an accurate quote. Furthermore, they will have a good understanding of the quality of the policy (particularly with critical illness cover and income protection). They will also be able to give sound advice around how best to structure the cover to keep costs to a minimum.

Give one of our Protection Specialists a call today and we’ll do just that.

At Visionary Finance, we believe first and foremost in the importance of providing excellent customer service. It’s the foundation that we have built our business on, established since 2008. We understand that the house buying process is a stressful and expensive process, with various fees and charges payable along the way. Some of these fees include solicitor fees, search fees, estate agent fees, valuation fees and mortgage product fees. All these fees can amount to thousands of pounds and therefore to reduce the fee burden on our clients, we offer a fee-free mortgage brokerage service.*

We manage the entire process on our clients’ behalf, from the initial fact-find, product and research stage, right through to application submission until the mortgage offer has been issued by the lender. For this end-to-end professional service, we do not charge our customers any brokerage fee. We only recover a procuration fee from the lender on completion of our client’s mortgage transaction. That means that we will stay completely engaged with our client’s mortgage application from the first conversation, right up until the mortgage funds are secured and completion of the house purchase has taken place. As providing excellent customer service to our clients is paramount, we have our own mortgage processing team who keep our clients updated throughout the application process. This ensures speed and efficiency of service, resulting in queries and document requests from lenders being responded to promptly.

We provide our customers with honest and impartial advice. We have got access to over 50 different high street and specialist mortgage lenders, some of whom aren’t available directly and only available via mortgage intermediaries like ourselves. This provides our customers with exposure to the whole of the mortgage market, giving us the ability and flexibility to service all personal circumstances and mortgage types.

We are approved by some of the largest new-build housing developers in the country. If you are looking to secure a new-build property, we can provide you with some excellent new-build mortgage options. We also provide specialist advice for the government help-to-buy mortgage schemes. If you’re seeking to get a foot on the property ladder, our vastly experienced mortgage consultants can discuss your options.

Our knowledge in the buy-to-let sector is unrivalled and we work with numerous experienced and professional landlords to help facilitate mortgage funding. Due to recent changes in the buy-to-let lending sector this area of mortgages has become very specialised. We are confident that by working with us you can be sure to be receiving the best buy-to-let mortgage advice, all for zero brokerage fee.

We’ve built our business on the firm foundations of providing a service we can be proud of. If you’d like to begin the process of securing a mortgage without having to pay a broker a fee and receiving unrivalled customer service then please get in touch with our team.

Please read our customer testimonials, demonstrating our credibility and give us a call on 01908 465100 if we can help secure a fee-free mortgage.*

In 2013, Help-to-Buy was released in a flurry of excitement – first-time buyers could get onto the property market with a 5% deposit and lenders were cushioned in the event of the homeowner defaulting on a mortgage.

The Help-to-Buy 95% mortgage loan-to-value guarantee scheme saw 20% of the mortgage amount underwritten by the government to encourage lenders back to the marketplace (after the FCA set strict lending criteria) by limiting their potential losses. While the later Help-to-Buy equity loan saw the government lend up to 20% of the cost of a new build home (up to 40% in all London boroughs since 1 February 2016), provided the buyer could find 5% cash deposit and a 75% mortgage – however, after five years, interest was due on the government loan and the government due its share of the equity growth or loss on its sale. The situation as it stands currently is that the mortgage guarantee scheme was discontinued in December 2016 while the equity loan scheme will continue until 2021, as confirmed by then Chancellor, George Osborne in November 2015.

This month, October 2017, Theresa May said the government will find an extra £10bn for the Help to Buy scheme to let another 135,000 people get on the property ladder. Details of this funding are due to be announced in November’s Budget.

This additional support raises some interesting questions. Why has only the Help-to-Buy equity loan continued? And why can’t the principle of an underwritten mortgage scheme be used to help first-time buyers who would like to buy a period property rather than a new build?

After all, what is the difference between a Help-to-Buy mortgage and a 95% loan-to-value (LTV) mortgage anyway? For many lenders, this is the most interesting question. Help-to-Buy was essentially a 95% mortgage that the government guaranteed (in part) that encouraged lenders to offer higher LTV ratios than they had previously. The mortgage for first-time buyers of new builds gave the property market a much needed boost.

To answer why one element of the Help-to-Buy scheme is continuing when the other hasn’t, it’s worth considering the house builders themselves. Currently 60% of new properties are built by ten companies; it stands to reason that those ten companies just can’t keep pace with demand. With the mortgage guarantee element scrapped but a continuation of the equity loan scheme, the government seems to be keen to support the developers who have already invested in future projects to increase the housing stock.

Two important things have happened since the introduction of Help-to-Buy then: one, developers have been supported to increase the much-needed housing stock and two, after seeing the reality of 95% mortgages, lenders are now feeling comfortable enough to increase the scope of the rest of their products. Proof of this is the fact that some have begun to offer mortgage products at high LTV ratios without government support and outside Help-to-Buy’s remit. These low-deposit mortgages are perfect for people who are already homeowners, perhaps young families, looking to take the next step but not able to save the finances to do so thereby helping to keep the market fluid.

Without governmental underwriting however, there are fewer products available in the 95% LTV range. The 95% mortgages are a higher risk for the lender (obviously without the government’s underwriting) and are likely to have higher interest rates. At the time of writing the comparison between the interest rates for Help-to-Buy and 95% mortgages is stark. Help-to-Buy: 1.39% (two-year fixed interest) versus a 90-95% LTV product at 3.89%.

So in much the same way as Help-to-Buy supported first-time buyers to buy a new-build, could the same principle be applied to support first-time-buyers to purchase a period property or a so-called ‘second-hand’ property? Could the government extend its underwriting support to all 95% LTV mortgages? According to Sarah Davidson in This is Money’ from January this year, the leap from 49 Help-to-Buy products in 2013 to 242 in 2017 shows that the Help-to-Buy scheme stopped lenders from seeing first-time buyers as ‘risky’ customers. In fact, since its launch, the scheme has helped more than 200,000 buyers, accounting for one in 12 of all first-time buyer transactions.

If the government could be encouraged to re-enter a mortgage guarantee scheme which included second-hand properties, as opposed to purely new-builds, then surely it would open up the housing market and give an entire swathe of the population some financial flexibility and better life choices, especially in areas of the countries where new-builds are not so prevalent.

Back in 2013, against a backdrop of tentativeeconomic recovery driven by the property market, the government introduced an inspired home buyer’s scheme known as Help to Buy. It would encourage more people to market by giving first-time buyers a helping hand with the deposit or mortgage costs especially when rising prices and stringent affordability tests were locking many buyers out.

Under the Help to Buy Equity Loan, the government lends up to -20% of the purchase price (up to 40% in London) to help buyers to get on the housing ladder, especially helpful for those who are perhaps struggling to save a deposit.

The Help to Buy ISA scheme boosts savings by 25% to help towards a deposit and in addition, the Help to Buy Shared Ownership scheme allows people to buy a portion of their home if they can’t afford mortgage payments on the full amount. They pay rent on the share of the property that they don’t own and can buy greater shares when they are able to.

With so many options, first-time buyers are no longer finding the first rung of the property ladder out of reach and house builders are experiencing a welcome boost in demand.

The good

In fact, figures from the Department for Communities and Local Government show that Help to Buy has been responsible for£17.7bn worth of properties; forbetween a third and a half of all new-build transactions; for80% of purchases by first-time buyers; and for14% of all new residential builds. More than100,000 people have benefitted from taking out a Help to Buy loan in one form or other.

New builds are particularly attractive under the scheme because only a 5% deposit is needed. Legal and General Mortgage Club noted that between 35-40% of its new build sales were through the scheme. So news that Help to Buy is under review and that’s its future is uncertain has been greeted with concern from all corners.

The bad

For all its success, the scheme has drawn criticism. Some financial experts have commented that the three different elements – the Help to buy Equity Loan, the Help to Buy ISA and the Help to Buy Shared Ownership – make it unnecessarily confusing. Other market watchers have noted that in creating a swathe of first-time buyers, it has boosted demand beyond housing stock capacity and driven up house prices further.

Liberum analysts commented that many people are using the scheme “do not actually need it” and there is the worry that house builders are setting too much store by the scheme. According to Emma Haslett writing for City A.M., more than 50% of sales at Persimmon are Help to Buy, a figure that is 40% at Taylor Wimpey, Galliford Try and Redrow.

The ugly

Further proof of house builders’ dependence on the scheme came in the form of a drop in share prices when an independent review by the London School of Economics was announced.Shares in Barratt, Taylor Wimpey and Persimmon fell by 5%, Bellway and Crest Nicholson fell 3.5% when it was rumoured that all options for the scheme’s future were being considered.

Once the Department for Communities and Local Government (DCLG) announced that the LSE evaluation was part of a regular review process, house builders recovered their share values. But it shows that Help to Buy has become a vital part of the property market, something that LSE will no doubt take into consideration.

Despite the initial panic, there is little likelihood that the scheme will finish before its scheduled 2021 end date. Some possibilities are that the scheme ends abruptly in 2021, or there is a tapering-off up to or after 2021, or the property price cap of £600,000 could simply be lowered and Help to Buy continues. In fact, new housing ministerAlok Sharma commented: “We have committed £8.6bn for the scheme to 2021, ensuring it continues to support homebuyers and stimulate housing supply. We also recognise the need to create certainty for prospective homeowners and developers beyond 2021, so will work with the sector to consider the future of the scheme.” Home buyers and builders will await the LSE’s review with great interest.

If you would like advice on how to make the most of Help to Buy over the next four years then make an appointment to speak to the Visionary Finance team.

The Bank of England is gaining powers to curb any lax lending in the fast growing buy-to-let mortgage sector, an area it has identified as posing a potential risk to the financial system.

The Treasury is to give Threadneedle Street the ability to restrict the size of loan relative to the value of a property and also limit the size of loans relative to the amount of rent landlords receive to cover interest payments.

Experts also said it led to a steep decline in property sales and has cost the economy nearly £1 billion because of a reduction in the number of people selling homes and a flow-on reduction in demand for services such as removals or renovation.